Impending new legislation for companies in Sri Lanka is expected to bring about a greater requirement for ethical standards, according to Roger Dickinson, the Chief Executive of the Institute of Chartered Secretaries and Administrators (ICSA) in the United Kingdom. In an interview with The Sunday Times FT, Mr. Dickinson, who was in the island to attend the convocation of the Institute of Chartered Corporate Secretaries of Sri Lanka, said he is hoping to increase membership in Sri Lanka which is currently only a few hundred strong. "This is an opportunity for us to train many more chartered secretaries here.."
As part of his visit, Mr. Dickinson met with the Registrar of Companies to come up with a plan to work together in order to encourage companies to adhere to corporate governance standards. Currently, the Imperial College of Business Studies is delivering ICSA's courses. "We feel it is important that people do this course. We hope that by growing our number fairly quickly, there will be a strong community that will raise corporate governance standards to a new level in Sri Lanka," he said.
The ICSA has around 36,000 members and around 12,000 students in 60 countries around the world. Mr. Dickinson said the Institute has very strong relations in Malaysia, Singapore and Hong Kong. "In general, I would say that standards in Asia are either up there or trying to get up there."
Given the current economic crisis around the world and the instances of poor decision making, there is an opportunity for chartered secretaries to do more to help boards improve their standards, Mr. Dickinson said. "We are of the view that it is not a tick box procedure. We are going to have to change the behaviour of directors. It's an ongoing process and we have to move the mindset." In the UK, the Institute has linked up with Hermes, one of the largest investor bodies and are looking at marking companies for their corporate governance performance. Companies that do well will be presented with an award and companies that also show innovation in the realm of corporate governance will be presented with awards.
ICSA is a professional membership body that qualifies its members to become board chartered secretaries. "Their role in companies is to maintain corporate governance standards within organizations," Mr. Dickinson said. "They are genuinely people who work at the board level and have contact with the chairman and board members to ensure that best corporate governance standards are achieved." Mr. Dickinson pointed out that the qualification is akin to an accountancy or legal qualification. Around 40% of people who take the ICSA exam have a legal background and about 25% have an accountancy background. However, the ICSA qualification is much broader. "When people come to the commercial world, they realize they need a wider field of knowledge."
Governments also consult ICSA on legislation. The biggest concern for companies is whether legislation is appropriate or too weak and therefore, cannot be enforced properly said Mr. Dickinson. "Depending on what part of the world it is, countries have different issues. For some countries, the main issue is corruption and nepotism." He added that ICSA is focusing on China at the moment. "China wants to improve corporate governance to attract inward investment," he said. "We are helping them to potentially train thousands on standards." ICSA is also helping the Dubai government which wants to position the gulf nation as a financial centre in the region. "The Dubai government wants us to help them on corporate governance for their financial community and training company secretaries for their stock exchange." |
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